Rio Tinto boss Tom Albanese was ousted from his job today as the mining giant revealed 2012 results will be hit by a £14billion charge.

Troubles with an acquisition in Mozambique and aluminium assets prompted the massive writedown and the swift departure of mining veteran Albanese, who joined Rio more than three decades ago and became chief executive in 2007.

Rio said he had stepped down by 'mutual agreement' and would be replaced by iron ore boss Sam Walsh.

Carrying the can: Rio Tinto has announced the surprise resignation of its chief executive Tom Albanese after taking a $14billion charge in connection with his two most significant acquisitions

Doug Ritchie, who led the acquisition
and integration of Mozambique coal assets when he was head of Rio's
energy division, has also quit after 27 years with the company.

Albanese and Ritchie will receive their
entitlement to pay, benefits and pension contributions but will not get
an annual short-term performance bonus for 2012 or 2013 or the long-term
share award for 2013.

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Albanese has carried the can for Rio's ill-fated acquisition of aluminium group Alcan for $38billion (£24billion) at the top of the market in 2007, when Rio was under pressure from rivals to bulk up or be acquired itself.

The business has generated big losses for the company in recent years due to the economic downturn.

In today's update, Rio said it was writing down the value of its aluminium assets in the range of $10-11billion (£6.2-£6.9billion). The group took a $8.9billion charge on them a year ago.

It had planned to shrink the division by hiving off most of its Australian and New Zealand assets for sale, but buyer interest is scant.

Meanwhile, Rio is also taking a $3billion (£1.9billion) writedown on Mozambique-focused coal miner Riversdale which it bought in 2011.

The group also expects to report a number of smaller asset write-downs in the order of $500million. The final figures will be included in Rio Tinto's full-year results on 14 February.

Chairman Jan du Plessis described the scale of the write-down on the relatively recent deal for Riversdale as 'unacceptable'.

He added: 'We are also deeply disappointed to have to take a further substantial write-down in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally.'

Du Plessis paid tribute to Albanese for his contribution to Rio Tinto over more than 30 years' service.

He said: 'Rio Tinto's underlying business and balance sheet remain in good health, and we are taking decisive action to improve our competitive position further with an aggressive cost reduction plan.'

Albanese said: 'While I leave the business in good shape in many respects, I fully recognise that accountability for all aspects of the business rests with the chief executive.'

The company, which specialises in aluminium, copper, diamonds and minerals, energy and iron ore, has its headquarters in London but the majority of its assets are in Australia and North America.

Shares in Rio were down 2 per cent or 82.25p at 3,375.75p in late morning trading.

Income shares watch: Rio announced a 34 per cent hike in its half-year dividend to 72.5 cents (45p) when it announced interim results last August. The shares yield 2.93 per cent.

View from the City

Louise Cooper of financial consultancy CooperCity commented: 'Out of the total impairment charge of $14billion, $3billion is from the acquisition of Coal Mozambique which was only purchased in 2011 for $4billion. So Rio overpaid three times for that asset! Wow!

'The $38bn cash acquisition of Alcan has been an utter disaster. The alumnium price is back at levels in the 1980s because although demand has grown dramatically so has supply. Unlike other commodities, the super cycle missed out aluminium.'

She added: 'Today's developments will make it more difficult for a mining CEO to make a big acquisition in the near future.'

Will Hedden, sales trader at IG, said: 'It is early days but we think that the market will be impressed by Rio’s face saving operation here.

'Many big name firms have been slow to react to poor M&A [merger and acquisition] deals over the last few years, and the growth of "shareholder power" in 2012 will have undoubtedly played a part in Rio’s defined line drawing here.'